PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund (ZROZ)
ARCA ARCA Primary 
XMEX 
ZROZ: Simple Treasury STRIPs ETF, For Dovish Traders And Investors
The Federal Reserve is guiding for several cuts in the coming months. Significant rate cuts would almost certainly lead to higher bond prices. Most bond funds would benefit, some more than others. ZROZ would be one of the biggest beneficiaries.
ZROZ: Deflationary Bust Needed To Save Bonds
Bond supply is surging and will likely rise further in a recession, increasing market pressure. On our last coverage, we suggested that locking in 30-year rates near 4.2% seems risky given the supply outlook. But how do we feel about 5.05%?
ZROZ Vs. TLT: One Has More Juice To Squeeze
The article examines the future of interest rates post Trump re-focus on Jerome Powell and the FED rate. PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange and iShares 20+ Year Treasury Bond ETF are two of the longest duration US debt focused ETFs and investors can sink their teeth into. Both are at two decade high yields.
ZROZ: A Real Conviction Play (Rating Upgrade)
The PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund ETF provides an active play on long-term yields while delivering income through sales on imputed returns. We see additional flattening of long-term bond yields being en route, possibly accommodated by a more docile term premium. Key economic indicators suggest the U.S. economy is intact. However, investors could price lower growth expectations, leading to price support for ZROZ via lower long-term yields.
ZROZ: Yields Are Just Too High, Reiterating Buy
Despite recent challenges, I maintain a "Buy" rating on PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF for its long-term potential. Although the ZROZ ETF has underperformed recently I believe it offers a significant margin of safety and attractive yield. Risk-averse investors may wait for more economic and geopolitical clarity, but long-duration bonds remain an appealing trade for 2025 and beyond.
ZROZ: If You Like Duration, You Will Love This Fund
ZROZ is a fixed-income ETF with a 27-year duration, highly sensitive to 30-year U.S. Treasury rate movements. Long rates are at the top of their historic range, expected to be range-bound between 4% and 5%. A 100 bps contraction in long rates could yield a 27% gain for ZROZ, making it an attractive buy.
ZROZ: Don't Be Confused By Macro Data
Despite recent volatility, I maintain a "Buy" rating on the ZROZ ETF as a recession hedge, given the uncertain economic outlook. Higher implied premiums may lead to worse performance of long-term US treasuries in a soft landing scenario. Potential downward revisions in non-farm payrolls data suggest long-term US Treasuries may see a sharp rally in early 2025.
ZROZ: Recession Protection On Sale
The PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF tracks long-dated US government STRIPS, giving it increased interest rate sensitivity. The current 4.5% yield on long-dated US treasuries is well above the Fed's neutral rate and should deliver higher returns relative to the short end of the curve. A 4.5% nominal annual return for 25-30 years will likely lag behind riskier alternatives such as equities or real estate.
ZROZ ETF: Better Staying On The Sidelines For Now
ZROZ ETF is a long-term zero-coupon bond vehicle managed by PIMCO, which has shed nearly 15% of its value in the past year. We believe the volatile interest rate environment makes this long-duration bond vehicle unattractive. A rising term premium and liquidity worries might dampen ZROZ's pricing and dividend-based prospects.
